The American auto market has always been driven by emotional purchases: you see a car that you love; you drive it off the lot the same day. Cars have long held an intimate place in the American imagination, aided by a media industry that loves auto—just think of iconic cars like the 1961 Ferrari 250 GT SWB California Spyder from Ferris Bueller’s Day Off, James Bond’s 1964 Aston Martin DB5, or the 1966 Ford Thunderbird from Thelma & Louise.
Consumers aren’t used to waiting to bring home their new wheels—but that’s exactly what they must do these days, thanks to a global semiconductor shortage that’s upended not just the supply chain, but also the auto retail model that’s existed for over 50 years in the US.
The good news? Auto consumers aren’t going away. According to J.D. Power, as many as five million consumers may be sitting on the sidelines waiting to buy a vehicle when demand constraints ease up. As such, the current auto landscape is characterized by pent-up demand: consumers are waiting for just the right moment to make their next big purchase.
These circumstances raise two big questions for auto marketers: First, how do you advertise products that are in dwindling supply? And second, how can dealers and brands prepare to meet pent-up consumer demand once the supply chain returns to pre-pandemic levels—which at least one major automaker doesn’t think will happen anytime soon.
The way automotive brands approach these questions will define their business for years to come. To that end, let’s dig into what auto advertisers can do to best situate their brands right now, and how they can prepare to meet pent-up consumer demand once the landscape stabilizes.
First things first: even though dealers and brands may not have the product supply they’re used to, cutting back on advertising is a short-term solution that will likely hurt you in the long run. When the supply chain finally does get back to something resembling “normal”, consumers will want to spend, and brands that have cultivated brand recognition and loyalty throughout the disruption will reap the benefits.
The next question, then, is how to market in the current automotive retail climate. Business as usual won’t cut it, because today’s consumer looks a lot different than the consumer of yesteryear.
Since 2020, global crises including the COVID-19 pandemic, the war in Ukraine, and record inflation have piled up, leading to an increasingly stressed consumer base. According to a recent study from the American Psychological Association, almost three-fourths of U.S. adults report feeling overwhelmed by the number of crises facing the world today.
The psychological impact of chronic stress means many consumers don’t have the same cognitive resources for decision-making. Stressed consumers tend to prefer consistency over novelty and want simple answers to complex questions. In a crowded marketplace where consumers have a huge array of options, dealers and brands must ask themselves how they can cut through the noise and foster brand loyalty. One surefire tactic? Lead with brand values. Today’s consumers want to know what causes and core beliefs they’re supporting when they buy from a certain company. Gen Z and millennials in particular want to support brands who do more than just sell goods and services—they want to build relationships with companies that are making a difference in the world.
Be wary, however, of coming across as inauthentic. Consumers today have sensitive B.S. radars—if you choose to focus on brand values in your marketing, it’s essential your messaging aligns with your actions behind the scenes.
Consumer demand for hybrid and electric vehicles (EVs) is rising, and automakers and dealers are responding in kind. Many of the industry’s major players have already started making EVs en masse, and they’re putting some serious dollars behind marketing their green credentials: Ford tapped Oscar-winning director Chloé Zhao for their spot during the 2020 (2021) Tokyo Olympics, General Motors ran an ad during Super Bowl LVI that reunited the Austin Powers cast, and Mercedes-Benz is involved in a major partnership with Avatar 2.
The clamor around EVs essentially comes against a backdrop of ballooning gas prices and growing consideration and sentiment around sustainability themes. And from an automaker’s perspective, tightened fuel economy rules from the Environmental Protection Agency (EPA), and laws in both California and New York requiring all new car and light truck sales to be EV or emissions-free by 2035 are providing additional incentive. Throw in better, “next-generation” battery technology and the future of auto really does look electric.
As interest evolves around EVs, marketers will need to focus on creating greater awareness around these products, educating consumers about the benefits of electric mobility, and emphasizing their commitment to sustainability. Both brands and dealers must also find ways to usher EVs into their marketing strategy without cannibalizing or alienating the (still critical) traditional gas-powered vehicle buyer.
The third thing dealers and brands can do to better advertise in the current auto retail market is leverage digital marketing to its fullest potential. The stats speak for themselves here:
Of course, while digital interaction is increasingly important for auto consumers, that doesn’t mean dealers and brands should leave the physical world behind. Research shows consumers want the convenience of a digital-first experience, but they don’t want to let go of the personal touch that comes with working with a dealer in-store. Enter the next challenge for auto advertisers: bridging the digital-physical divide and making the hybrid consumer journey as seamless as possible.
Fortunately, there are existing resources and solutions that can help automotive advertisers achieve that seamless consumer experience...
Now that we’ve covered how dealers and brands can market to consumers while disruption in the auto space endures, let’s look ahead to the fun stuff: meeting pent-up consumer demand once the supply chain stabilizes. The winning strategy here? Personalization and scale.
Personalization is quickly becoming the norm across the digital ecosystem, with 56% of consumers expecting offers to always be personalized. In order to earn those post-economic disruption dollars, auto marketers will need to be able to:
Dealers and brands who prepare their tech and partnerships now will be able to meet pent-up consumer demand once the marketplace stabilizes. A data-driven approach to digital marketing will be critical for building and reaching high-quality automotive audiences. When evaluating where to invest, two solutions should be top-of-mind: first-party data and automation.
To create a personalized, stress-free car buying experience, you have to know your audience. And with third-party cookies on their way out, marketers will need to set up new systems for gathering information about their customers and meeting them in their moment.
For auto dealers and brands, first-party data offers an avenue for providing personalization at scale. Advanced customer data infrastructure, for example, can collect and unify first-party data from multiple sources—including CRM, website, and ads—to build a single, coherent, and complete view of each customer. Marketers can then use the collective data to create targeted and personalized marketing campaigns that enable one-to-one communication with consumers.
If first-party data is the wheels that enable marketers to connect with consumers, advertising automation tools are the engines that allow marketers to use that data effectively.
Personalization strategies are inherently nuanced and achieving them at scale requires a level of flexibility and efficiency that is nearly impossible to achieve manually. The fragmented and complex marketing media landscape means advertisers are often slowed down at several stages of the campaign, including planning, performance optimization, and measurement. Recent research from Advertiser Perceptions reveals that the majority of advertising professionals use an average of nine platforms for a typical ad campaign (and touch seven of those platforms in a day), highlighting the need for technology that removes silos and simplifies campaign management across the board. By adopting advertising automation solutions, auto marketers can find the agility required to align and shift ad spending in a turbulent market, while ensuring ads are reaching high-value targets to drive measurable outcomes.
Whew! That’s a lot for automotive marketers to think about and prepare for. The good news is that despite economic disruption—or perhaps even because of it—the time is now for auto dealers and brands to chart lucrative new paths for themselves.
Those who take this opportunity to further define and promote their brand values and forge genuine relationships with their audiences will find themselves well-positioned to earn their business—whether those audiences decide to purchase now or wait until the supply chain stabilizes. And investing in digital, first-party data, and automation-driven technology will put dealers and brands at the forefront of advertising innovation, pushing the boundaries of what personalization can look like at scale.
All in all? Vin Diesel said it best in the Fast and the Furious 9: “I choose to make my own fate.” In the face of supply chain disruption, macroeconomic crises, and a stressed consumer base, brands who choose to take the wheel now—pun very much intended—will be frontrunners in the years to come.
Basis is ushering in a new vision of automation and intelligence for the automotive industry. Connect with us to learn more!